INCOME TAX REGULATORY UPDATES
ORDER F.NO. 225/98/2020-ITA-II, DATED 30-09-2021
CBDT further extends time limit to process refund claimed ITRs filed up to AY 2017-18 to 30-11-2021
Editorial Note: Vide, Order F. No.225/98/2020-ITA-II, dated 5-7-2021, the CBDT has directed that all validity filed returns up to Assessment Year 2017-18 with refund claims, which have become time-barred, can be processed till 30-09-2021. Considering the pendency of taxpayer’s grievances, the board has decided to extend the time frame by two months. Now the ITRs shall be processed by 30-11-21.
ORDER F.NO. 299/22/2021-DIR (INV. III)/174, DATED 28-09-2021
CBDT authorized CIT to admit and process application filed before Interim Board by extended due date of 30-09-21
Editorial Note: To provide relief to the taxpayers who were eligible to file application as on 31.01.2021, but could not file the same due to cessation of ITSC vide Finance Act, 2021, the CBDT, vide Press Release, dated 7-9-21 decided that applications for settlement can be filed by 30-09-21 before the Interim Board. Now, the board has authorized the CIT posted as Secretary to the SetCom prior to 01.02.2021 to admit and process such applications.
ORDER F. NO. 187/3/2020-ITA-I, DATED 22-09-2021
Reassessment/set-aside cases where time limit for complication expires on 30-9-21 to be excluded from Sec. 144B
Editorial Note: The CBDT has notified two more situations where the assessment not to be done under the faceless assessment regime. Assessment for cases where afresh assessment to be made due to set-aside of assessment order or assessment to be done under section 147 shall be completed by jurisdictional AO if the time limit for completion expires on 30-9-21. However, such assessment shall be pending with jurisdiction AO as on 11-09-21 or thereafter.
NOTIFICATION NO. S.O. 3814(E) & PRESS RELEASE, DATED 17-09-2021
CBDT extends due dates for linking Aadhaar-PAN, completion of penalty & Benami proceedings
Editorial Note: To address the hardships being faced by various stakeholders, the Central Government has extended the due dates of a few compliances. The last date to link PAN with Aadhaar has been extended to 31-03-2022. The due date for completion of penalty
proceedings has also been extended from 30-09-21 to 31-03-22. Further, the time limit for issuance of notice and passing of order under the Prohibition of Benami Property Transactions Act, 1988 has also been extended to 31-03-22.
NOTIFICATION NO. S.O. 3815(E) & PRESS RELEASE, DATED 17-09-2021
No Sec. 194A TDS on interest paid to resident of Scheduled Tribes areas specified u/s 10(26)
Editorial Note: The Central Board of Direct Taxes (CBDT) has notified that no deduction of tax shall be made under section 194A on the payment in the nature of interest, other than interest on securities, made by a Scheduled Bank located in a specified area, to a member of Scheduled Tribe residing in any specified area as referred to in section 10(26) subject to the fulfilment of prescribed conditions.
NOTIFICATION NOS. S.O. 3800 & S.O. 3801, DATED 16-09-2021
CBDT notifies 2 more pension funds for Sec. 10(23FE) exemption
Editorial Note: The Central Board of Direct Taxes (CBDT) has notified two more pension funds namely, the 2452991 Ontario Limited and the 276522 Ontario Limited for the purpose of exemption under section 10(23FE). The notified funds shall be eligible to claim exemption in respect of investment made in India on or before 31-03-2024 subject to prescribed conditions.
NOTIFICATION NO. G.S.R. 627(E), DATED 13-09-2021
CBDT notifies ‘income-tax authority’ to serve notice u/s 142(1)(i) asking assessee to furnish ITR
Editorial Note: The CBDT has prescribed that the income-tax authority under second proviso to section 142(1)(i) shall be an income-tax authority not below the rank of Income-tax Officer who has been authorized by the board to act as such authority to serve notice asking assessee to furnish ITR.
NOTIFICATION NOS. S.O. 3680(E), 3681(E), S.O. 3679(E), S.O. 3678(E) AND G.S.R. 623(E), DATED 10-09-2021
Govt. notifies numerous tax concessions to ease ‘Air India’ divestment
Editorial Note: The Government has notified several tax concessions to ease privatization of Air India. TDS/TCS provisions shall not be applicable on transfer of goods. Any transfer of capital asset by Air India shall not be regarded as transfer to attract capital gains. Further the provisions of section 56(2)(x) shall also be not applicable.
PRESS RELEASE, DATED 07-09-2021
Taxpayers eligible to file application before SetCom as on 31-01-21 can file it before Interim Board by 30-9-21: CBDT
Editorial Note: In order to provide relief to the taxpayers who were eligible to file application as on 31.01.2021, but could not file the same due to cessation of ITSC vide Finance Act, 2021, it has been decided that applications for settlement can be filed by the taxpayers by 30th September, 2021 before the Interim Board subject to fulfillment of prescribed conditions.
Circular No. 17 / 2021 dated 9th September 2021
Extended dates
- The due date of furnishing of Return of Income for the Assessment Year 2021-22, which was 31 5t July 2021 under sub-section (1) of section 139 of the Act, as extended to 30th September, 2021 vide Circular NO.9/2021 dated 20.05.2021 , is hereby further extended to 31 st December, 2021 ;
- The due date of furnishing of Report of Audit under any provision of the Act for the Previous Year 2020-21 , which is 30th September 2021 , as extended to 31 st October 2021 vide Circular NO.9/2021 dated 20.05.2021 , is hereby further extended to 15th January, 2022;
3. The due date of furnishing Report from an Accountant by persons entering into intemational transaction or specified domestic transaction under section 92E of the Act for the Previous Year 2020-21 , which is 31 st October 2021 , as extended to 30th November 2021
vide Circular NO.9/2021 dated 20.05.2021 , is hereby further extended to 31 st January, 2022;
- The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 31 st October 2021 under sUb-section (1) of section 139 of the Act, as extended to 30th November 2021 vide Circular NO.9/2021 dated 20.05.2021 , is hereby further extended to 15th February, 2022;
- The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 30th November 2021 under sub-section (1) of section 139 of the Act, as extended to 31 st December 2021 vide Circular NO.9/2021 dated 20.05.2021 , is hereby further extended to 28th February, 2022;
- The due date of furnishing of belated/revised Return of Income for the Assessment Year 2021-22, which is 31 st December 2021 under sub-section (4)/subsection (5) of section 139 of the Act, as extended to 31 st January, 2022, vide Circular NO.9/2021 dated 20.05.2021 , is hereby further extended to 31 st March, 2022;
Clarification 1: It is clarified that the extension of the dates as referred to in clauses (9), (12) and (13) of Circular NO.9/2021 dated 20.05.2021 and as referred to in clauses (1), (4) and (5) of this Circular shall not apply to Explanation 1 to section 234A of the Act, in cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of sub-section (1) of that section exceeds one lakh rupees.
Clarification 2: For the purpose of Clarification 1, in case of an individual resident in India referred to in sUb-section (2) of section 207 of the Act, the tax paid by him under section 140A of the Act within the due date .
PRESS RELEASE, DATED 07-09-2021
CBDT extends benefit of authenticating electronic records under EVC to persons required to do so by digital signature
Editorial Note: In order to provide the benefit of the simplified process of authentication of electronic records by EVC, the CBDT has been decided to extend the simplified process of authentication by EVC to persons who are mandatorily required to authenticate electronic records by digital signature.
CIRCULAR NO. F NO. 187/3/2020-ITA-I, DATED 06-09-21
Cases not created on ITBA due to technical bugs or not having PAN to be excluded from Faceless Assessment: CBDT
Editorial Note: The CBDT has notified exclusion to case where Assessment Order not to be passed under faceless assessment regime. The Board has notified that Assessment Orders in cases where pendency couldn’t be created on ITBA because of technical reasons or cases not having a PAN shall not be passed by the National Faceless Assessment Centre under section 144B.
NOTIFICATION NO. G.S.R. 616(E), DATED 06-09-2021
CBDT prescribes manner for authenticating electronic records under EVC for faceless assessment
Editorial Note: The CBDT has prescribed manner for authenticating electronic records under electronic verification code (EVC) as required by section 144B (7) (i) (b). It is provided it shall be deemed that the electronic record has been authenticated under electronic verification code if an assessee or any other person submits an electronic record by logging into his registered account in designated portal of the Income-tax Department.
NOTIFICATION F. NO.225/97/2021/ITA-II, DATED 06-09-2021
CBDT notifies procedure for handling assessment if case is transferred by NFAC to Jurisdictional AO
Editorial Note: Section 144B(8) of the Income-tax Act provides that National Faceless Assessment Centre may for transfer case to Jurisdictional Assessing Officer at any stage of assessment proceedings. The board has notified that the procedure for handling of assessment by Jurisdictional AO in respect of assessments/penalties transferred out of Faceless
Assessment under section 144B /Faceless Penalty Scheme, 2021
Relief for Road Contractors; NHAI to pay GST on Annuity under HAM Model
Editorial Note: The Govt. issued a clarification on applicability of GST on road construction under HAM Model that NHAI would reimburse/ pay GST on Annuity payment for the projects where bid due date is before 16-06-2021. Whereas after 16-06-2021, GST would be payable by contractors on Annuity and interest amount & TDS under GST would also be applicable.
NOTIFICATION NO. S.O. 3615(E), DATED 02-09-2021
CBDT notifies ‘Real Estate Regulatory Authority’ for exemption under section 10(46)
Editorial Note: The Central Board of Direct Taxes (CBDT) has notified ‘Real Estate Regulatory Authority’, constituted by the Government, in exercise of powers conferred under section 20(1) of the Real Estate (Regulation and Development)
NOTIFICATION NO. 99 /2021, DATED 02-09-2021
CBDT notifies Form 12BBA to be submitted by senior citizens wishing to claim benefit of Sec. 194P
Editorial Note: The board has notified a new Rule 26D to provide that senior citizens are required submit Form 12BBA with specified bank in order to claim the benefit of section 194P. The board has also amended Form 16, Form 24Q, Form 26QC and Form 26QD to incorporate necessary changes related to provisions of section 194P.
NOTIFICATION NO. S.O. 3595(E), DATED 02-09-2021
CBDT notifies ‘specified bank’ for the purpose of TDS u/s 194P in case of specified senior citizen
Editorial Note: To provide relief to the senior citizens (whose age is 75 years or more) and to reduce compliance burden on them, the Finance Act, 2021, has inserted Section 194P. This provision requires a ‘specified bank’ to deduct tax if deductee is maintaining an account with it in which he is receiving his pension income. The CBDT has notified such ‘specified bank’ as banking company/scheduled bank defined under Sections 45A & 2 of RBI Act, 1934.
CIRCULAR NO. 16/2021, DATED 29-08-2021
CBDT extends due dates for filing of various forms
Editorial Note: Due to the difficulties reported by the taxpayers & other stakeholders, the CBDT has issued Circular No. 16/2021 for extending the due dates for e-filing of certain forms under the Income-tax Act, 1961. The due date for filing of application for registration or approval under Section 10(23C), 12A, 35 and 80G also stands extended to 31st March 2022.
NOTIFICATION F.NO. 370142/47/2021-TPL, DATED 28-08-2021
CBDT releases draft Rule & Forms to implement amendments made by TLA 2021; invites public comments
Editorial Note: The CBDT has proposed to insert a new Rule 11UE along with Forms 1 to 4 which specify the conditions to be fulfilled and the process to be followed to give effect to the amendments made by the Taxation Law (Amendment) Act, 2021 [TLA 2021]. TLA 2021 has been enacted to provide relief to certain entities impacted by the retrospective amendments made by the Finance Act 2012 relating to indirect transfer of assets situated in India.
PRESS RELEASE, DATED 27-08-2021
Income-Tax Dept. conducts searches in Rajkot and Visakhapatnam
Editorial Note: The Income-tax dept. has carried out search operations on group based in Rajkot and Visakhapatnam. Group based in Rajkot is among Gujarat’s prominent real estate builders & developers and is actively engaged in real estate, construction and land trading businesses. The search and seizure operation has resulted in detection of concealment of income in excess of Rs. 300 crore.
NOTIFICATION NO. G.S.R. 578(E), DATED 18-08-2021
CBDT notifies Rules prescribing ‘any other person’ to verify ITR & appear before authorities for Co./LLP
Editorial Note: The CBDT has inserted two new Rules, i.e., Rule 12AA & Rule 51B to the Income-tax Rules, 1962. Rule 12AA prescribes ‘any other person’ who shall verify Income-tax Returns in case of companies and Limited Liability Partnership (LLP). Similarly, Rule 51B prescribes ‘any other person’ who shall be treated as authorized representative before any income-tax authority.
President Ram Nath Kovind gives assent to the Taxation Laws (Amendment) Act, 2021
Editorial Note: The Taxation Laws (Amendment) Bill, 2021has received the assent of the President, Shri Ram Nath Kovind, on 13th August, 2021. The Taxation Laws (Amendment) Act, 2021 (No. 34 of 2021) has revoked the retrospective applicability of the amendments made in Section 9 by the Finance Act, 2012
CIRCULAR NO. 1/2021-22/439, DATED 9-8-2021
NFAC issues SOPs for Penalties under Faceless Penalty Scheme, 2021
Editorial Note: National Faceless Assessment Centre, Delhi, has issued Standard Operating Procedures (SOPs) with the approval of CBDT for completing the penalties under the Faceless Penalty Scheme, 2021.
NOTIFICATION NO. G.S.R. 551(E), DATED 10-08-2021
CBDT notifies Rule for computation of tax relief on Book Profits increased due to APA/Secondary Adjustments
Editorial Note: The Finance Act, 2021 has inserted a sub-section (2D) to Section 115JB to provide that AO, on an application by the assessee, shall re-compute book profit of the past years and tax payable thereon if assessee’s current year’s income has increased due to repatriation on account APA or secondary adjustment. The CBDT has notified Rule 10RB prescribing manner for computation of relief in tax payable under section 115JB(1) due to operation of newly inserted sub-section (2D) of section 115JB.
NOTIFICATION NO. G.S.R. 514(E), DATED 29-07-2021
CBDT omits certain rules & Forms; Board to specify e-filing of forms which are prescribed in Appendix II
Editorial Note: The CBDT has omitted certain rules and forms notified in Appendix II. However, any proceedings pending before income-tax authority or court shall be continued & disposed of in accordance with such rules and forms. Further, the PDGIT(systems)/DGIT(systems) may specify any of the Forms, returns, statements, etc., prescribed in Appendix II, which shall be furnished electronically.
NOTIFICATION NO. G.S.R. 545(E), DATED 09-08-2021
CBDT notifies rules to compute exemption & income taxable at concessional rates in hands of specified fund
Editorial Note: The CBDT has inserted two new rules, i.e., Rule 21AI and 21AJ in the Income-tax Rules, 1962. Rule 21AI provides for manner for computation of exempt income of specified fund for the purposes of section 10(4D). Whereas Rule 21AJ deals with determination of income of specified fund attributable to units held by non-residents under section 115AD(1A). Specified funds means Category III AIF, located in IFSC, and in which all units other than unit held by a sponsor or manager are held by non-residents
PRESS RELEASE, DATED 09-8-2021
‘Vivad Se Vishwas’ scheme settles Rs. 99,756/- crore of disputed tax amount: FinMin
Editorial Note: The Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Lok Sabha has shared the status of declarations filed under Vivad Se Vishwas Scheme. A total of Rs. 99,756 crore of disputed tax amount has been settled as per declaration filed under the Scheme.
NOTIFICATION NO. S.O. 3138(E) & S.O. 3139(E), DATED 04-08-2021
CBDT notifies certain entities for exemption under section 10(46)
Editorial Note: The Central Board of Direct Taxes (CBDT) has notified ‘National Council of Science Museums’ and ‘Real Estate Regulatory Authority’ for the purposes of the clause (46) of section 10 of the Income-tax Act, 1961.
NOTIFICATION NO. S.O. 3114(E), DATED 03-08-2021
CBDT notifies ‘Ontario Inc.’ as pension fund for Sec. 10(23FE) exemption
Editorial Note: The Central Board of Direct Taxes (CBDT) has notified pension funds namely, Ontario Inc., for the purpose of exemption under section 10(23FE). The notified funds shall be eligible to claim exemption in respect of investment made in India on or before 31-03-2024 subject to prescribed conditions.
RECENT JUDICIAL RULINGS ON INCOME TAX
SECTION 4 OF THE INCOME-TAX ACT, 1961 – INCOME – CHARGEABLE AS OTHER INCOME:
Where assessee filed no return for year under consideration while AO found that assessee had purchased immovable property and she had earned interest from mutual funds as also receipt of premia from Insurance company, reassessment was justified – C. Anitha v. Income-tax Officer, Non – Corporate Ward 1(1), Chennai – [2021] 130 taxmann.com 347 (Madras)
SECTION 9 OF THE INCOME-TAX ACT, 1961 – INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA
In case of assessee engaged in business of operation of ships in international traffic, benefit of article 8 of Indo UAE Treaty must be extended to entire freight receipts, irrespective of whether earnings are relating to feeder vessels or by ships in international traffic – Avana Global FZCO v. Deputy Commissioner of Income Tax (International Taxation) – [2021] 130 taxmann.com 481 (Mumbai – Trib.)
SECTION 150 OF THE INCOME-TAX ACT, 1961 – INCOME ESCAPING ASSESSMENT – IN PURSUANCE OF AN ORDER ON APPEAL, ETC.
Reassessment: Where Assessing Officer passed reassessment order on direction of Commissioner (Appeals) to assess undisclosed income in hands of assessee’s HUF and exclude same from hands of assessee as an individual since as per Explanation 2 to section 153, such an assessment would be deemed to be made in consequence of or to give effect to any finding or direction contained in appellate order to invoke such reassessment proceedings no independent finding was required – Principal Commissioner of Income-tax-4, Kormangala v. Rajkumar C (HUF) – [2021] 130 taxmann.com 349 (Karnataka) leave, provident fund, gratuity, bonus etc. and were not subject to retirement from services, said doctors could not be construed as employees of assessee-hospital and, consequently, payment made to them attracted section 194J and not section 192 – Deputy Commissioner of Income-tax, (OSD) (TDS)-2(2) v. Sir Hurkisondas Nurrotumdas Hospital & Research Centre – [2021] 130 taxmann.com 324 (Mumbai – Trib.)
SECTION 220 OF THE INCOME-TAX ACT,1961 – COLLECTION AND RECOVERY OF TAX – WHEN TAX PAYABLE AND WHEN ASSESSEE DEEMED IN DEFAULT
Where petitioner-society had filed an appeal before Faceless Appeal Centre regarding disallowance of benefits available under sections 11 and 12 and same was pending, until said appeal was decided, demand made in this regard by Assessing Officer which included amount otherwise to be exempted for relevant assessment year in so far as claim of exemption made under benefit of sections 11 and 12, may not be considered to be a tax in default and therefore, said pending appeal shall be taken into account by Assessing Officer within meaning of section 220(6) and accordingly order shall be passed by Assessing Officer – Aiman Education and Welfare Society v. National Faceless Appeal Centre, New Delhi – [2021] 130 taxmann.com 483 (Madras)
SECTION 241A OF THE INCOME-TAX ACT, 1961 – REFUND
Power to withhold, in certain cases : SLP dismissed due to delay against High Court ruling that where assessee filed its return declaring loss and claimed refund of entire amount of tax paid at source, merely because in immediately preceding assessment year assessee had declared a positive income as against substantial loss declared in relevant assessment year, it could not be a ground to doubt contents of return or claim of assessee with respect to loss suffered and withhold refund claimed by assessee – Deputy Commissioner of Income-tax, CPC v. Vodafone Idea Ltd. – [2021] 130 taxmann.com 325 (SC)
SECTION 194J OF THE INCOME-TAX ACT, 1961 – DEDUCTION OF TAX AT SOURCE – FEE FOR PROFESSIONAL OR TECHNICAL SERVICES
Doctor’s fee: Where remuneration paid to consultant doctors engaged by assessee-hospital varied from month-to-month owing to services rendered and number of patients attended by them and, further, these doctors were not entitled to any leave, provident fund, gratuity, bonus etc. and were not subject to retirement from services, said doctors could not be construed as employees of assessee-hospital and, consequently, payment made to them attracted section 194J and not section 192 – Deputy Commissioner of Income-tax, (OSD) (TDS)-2(2) v. Sir Hurkisondas Nurrotumdas Hospital & Research Centre – [2021] 130 taxmann.com 324 (Mumbai – Trib.)
SECTION 220 OF THE INCOME-TAX ACT,1961 – COLLECTION AND RECOVERY OF TAX – WHEN TAX PAYABLE AND WHEN ASSESSEE DEEMED IN DEFAULT
Where petitioner-society had filed an appeal before Faceless Appeal Centre regarding disallowance of benefits available under sections 11 and 12 and same was pending, until said appeal was decided, demand made in this regard by Assessing Officer which included amount otherwise to be exempted for relevant assessment year in so far as claim of exemption made under benefit of sections 11 and 12, may not be considered to be a tax in default and therefore, said pending appeal shall be taken into account by Assessing Officer within meaning of section 220(6) and accordingly order shall be passed by Assessing Officer – Aiman Education and Welfare Society v. National Faceless Appeal Centre, New Delhi – [2021] 130 taxmann.com 483 (Madras)
SECTION 241A OF THE INCOME-TAX ACT, 1961 – REFUND
Power to withhold, in certain cases : SLP dismissed due to delay against High Court ruling that where assessee filed its return declaring loss and claimed refund of entire amount of tax paid at source, merely because in immediately preceding assessment year assessee had declared a positive income as against substantial loss declared in relevant assessment year, it could not be a ground to doubt contents of return or claim of assessee with respect to loss suffered and withhold refund claimed by assessee – Deputy Commissioner of Income-tax, CPC v. Vodafone Idea Ltd. – [2021] 130 taxmann.com 325 (SC)
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